Ellsworth eyes lean budget for FY 2011

ELLSWORTH, Maine — Faced with a soft economy that has resulted in a decrease in municipal revenues, the city has proposed a very lean budget for the 2011 fiscal year.

Although the operating budget shows an increase of 2.645 percent, the tax rate would remain steady at 13.35 mills if the City Council approves the budget as presented. City councilors are scheduled to review the budget during workshops over the next month and likely will have to make some hard decisions in order to maintain the mill rate, according to City Manager Michelle Beal.

The total city budget for 2011 is $10,099,949, an increase of $132,302 from the current budget. That includes proposed capital improvements of more than $1.5 million and expenditures through the tax incremental financing account. The operational portion of the budget totals $8,011,694, an increase of $206,472.

Revenues to the city are down for the coming year, by about $200,000; more than half of it in state revenues.

“We expected a reduction,” Beal said Thursday. “But they also cut the percentage we receive so there was a lot more of a reduction than we anticipated.”

The city will receive more than $100,000 less in state subsidy, and revenues from fees and permits are down by almost $100,000, she said.

The sluggish economy over the past year or so has resulted in less construction than normal, which has translated to less revenue from building permits and other fees.

As a result, Beal said, the proposed budget is very lean with little or no increases in most areas.

“This is a very flat budget,” she said. “Department heads worked very hard, and most came in with no increase in their budget and some had reductions. There’s no change in the mill rate.”

The budget includes no new positions and no salary increases for city employees, Beal said. It includes reduced spending on capital items, including one less police cruiser, road improvement, technology purchases and work on the ball fields.

Despite the lean budget, Beal said, as city councilors work through the budget in the coming weeks they will have to make some policy decisions about capital improvements, continued funding for reserve accounts and for continuing programs and projects. That could affect the mill rate.

One major factor will be the city’s share of the Regional School Unit 24 budget. The flat mill rate is based on a flat school budget, and Beal said officials already know the school budget is likely to be higher than last year’s.

The proposed budget lists the school costs at almost $7.3 million. Beal said the superintendent already has indicated that Ellsworth’s share of the budget likely will be closer to $8.2 million. The city set aside $500,000 last year to be used for anticipated increases in school costs, she said. That still leaves a $500,000 gap that will have to be filled.

If the council wants to maintain the mill rate at its current level, councilors will have to look for cuts elsewhere in the municipal budget, she said.

Superintendent Bill Webster is scheduled to provide an update on the school budget at the budget workshop session on April 26. Another budget workshop is set for May 3, with the final budget review set for May 24. The council is expected to vote on a final budget at its regular meeting in June.